VRA Update: The Perma Bears Are Out AGAIN!

Beginning this week, I have started to see all of those same perma-bears calling for ’The Big One”…the global stock market crash that they have been predicting for years. 

Once again, they will be proven wrong. Here’s how I know this to be the case; VERY FEW experts ever see a "big one" coming…in fact, in my entire career, I have yet to see more than 1-2 people get this kind of prediction right. Let that sink in….because right now, all of those same “little boys that cry wolf” are calling for THE BIG ONE.

Folks, crashes are called a crash because they tend to catch almost everyone off-guard. That just ain’t the case right now….

As to China, I have just finished reading some incredibly interesting analysis by the IMF (intl. monetary fund) on the recent moves out of China, and the devaluing of their currency. Turns out…and this is pretty big guys and girls…that this is EXACTLY what the IMF and World Bank had been recommending China to actually do.

Why? Well, in order for China’s Yuan to be included as a so-called "world's reserve currency", they have been advised that they MUST join in with the rest of the planet, and they must weaken their currency.

Having said that, I STILL want to see a selling climax before taking aggressive action on the long side. Ideally, that would mean a Monday morning major sell-off….on big volume. THAT would be “seeing the whites of their eyes”. Also, we just haven’t reached big time oversold levels yet…as crazy as that may seem.

Finally, and this is pretty compelling….as of this week, 56% of all S&P 500 stocks are already in correction territory, with more than half of these down over 20% from their recent highs. The current sell-off isn’t actually new….and it may well be entering its final phase soon.

I want to act…I see 2-3 really interesting opportunities, but not quite ready to catch a falling knife. This does feel like lower prices need to occur first…the question is, how much lower?

Kip

vraletter.com